www.reuters.com
Sounds like Barron could be off based on the above European Banker's opinion and chart.
Didn't we have similar issues with the bailout of the auto companies in 2009? I know there were issues with pensions, especially between hourly and salary.
www.reuters.com
www.wsj.com
I said it last week. The cmbs held by banks are underwater. This is mainly due to office buildings being vacant that once use to be hard to find. When those ARM come up, defaults will start to pile up much like the Blackstone one for 500b. I highly doubt it is only 2.2T when factoring in vacancies.The next shoe to drop?
In a recent paper, a group of economists including Mr. Piskorski estimated that the value of loans and securities held by banks is around $2.2 trillion lower than the book value on their balance sheets.
Commercial Property Debt Creates More Bank Worries
Regulators and analysts are growing concerned about loans backed by office buildings, as many skyscrapers and other office properties have lost value during the pandemic era.
One of the bigger issues with banking in my opinion: I can do almost everything in my brokerage account I can do in my checking account plus invest funds. My banks don't offer me anything special now (no better terms on loans or CCs, still 0% return on deposits) and I have to pay fees for things I get for free from my brokerage account.
I've used credit unions my entire life. I couldn't understand how anyone could justify using a bank.
My property management company uses a large bank for rent. Tenants anywhere can drive 1-2 miles to deposit rent if they don't want to use the online portal. That is the ONE benefit of a large bank.
I had a regular bank for my business because credit unions are generally averse to corporate accounts.
The only way I see that happening is if earnings collapse. The market is a forward indicator and is anticipating an end of rate hikes, energy and banks stabilizing, with a continuation of a strong labor market.
speaking of reserves. Our oil supplies are rising and the price of oil is dropping.
The last few times we saw a huge drop (~$30) was 2020. Before that was 2018, 2014, and 2008. 2018 and 2014 were because of Trump's China tariffs and lifting sanctions on Iran, and 2014 was the increase in shale production.
